Defunct Tech Group’s Exec Settles SEC Claims

     SAN FRANCISCO (CN) – A former top accounting executive of the now-defunct OCZ Technology Group settled claims of securities fraud by the Securities and Exchange Commission on Tuesday.
     The SEC sued Arthur F. Knapp Jr. along with former OCZ CEO Ryan Petersen, on Oct. 6, claiming the two men defrauded investors of $200 million between 2010 and 2012.
     Knapp, 66, of San Jose, served as the company’s chief financial officer and vice president of finance from 2005 to 2013. The de facto chief accountant juggled the books with accounting tricks, causing the company to overstate revenue by $100 million from 2011 to 2013, according to the SEC.
     U.S. District Judge Beth Labson Freeman entered a final judgment against Knapp on Oct. 13, permanently barring him from acting as officer or director of any securities-backed entity and ordering him to pay $130,000 in disgorgement, civil penalties and interest.
     Knapp consented to the judgment without admitting or denying any of the SEC’s allegations.
     According to the SEC, Knapp disguised the costs of goods sold as research and development expenses, misclassified labor and overhead costs, recorded profits when goods were shipped and not paid for, and understated the costs of product returns.
     The SEC lawsuit lobbed seven claims at Knapp, including fraud, failure to implement controls, falsifying books and other claims.
     OCZ declared bankruptcy in December 2013, and Toshiba acquired its assets in January 2014.
     Peterson still faces similar claims for his role in the alleged securities fraud scheme.
     The SEC did not immediately return a request for comment.

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